No matter what your age, you can adjust your retirement savings while the markets are so volatile.
SAN ANTONIO — It has been a volatile week of whiplash in the stock market, with the concerns of tariffs by the Trump administration and their economic impact. We looked into 401(k)s and what you can do to protect them when the market turns bloody red.
Those that are often hurt in a bear market like this one are often emotional ones who make irrational moves. When the market sells off, especially for younger people with 401(k)s, that is the prime time to buy. Bill Dendy, a certified financial planner with Alicorn Investment Management told us, “As a young person, it’s oftentimes all long term. One day, if I ever get to retirement, this will be grown up and we can afford the market dips and the recoveries.”
But if you are nearing retirement and fear more drops in the market ahead, make sure to limit your risks. Dendy added, These folks were probably overexposed at the market. As you enter retirement, you want to have visibility on your first year to two years of income, and you probably want to pull back on the throttle.
According to a 2024 report by Vanguard, the average 401(k) account balance for those under 25 is close to $7,000. That jumps to more than $37,000 for the 25 to 34 age group. More than $91,000 for those 35-44. For those aged 45 to 54 an average balance of more than $168,000. Close to a quarter million for those between 55 and 64. And 65 and up, an average 401(k) balance of more than $272,000. Dendy also told us, “The market’s never been higher than where it is today even after the pullback. But we have seen and we’ve got a reminder of how rough the market ride can be.”
Some tips…Have cash at the ready. You don’t want use your 401(k) as an emergency fund. Make sure you diversify with a mix of stocks and bonds. Invest in dividend-paying stocks. And have money set aside to scoop up bargains, also known as buying the dip. In addition Dendy told us, “For those who have cash on the sidelines, they’re like, is it time to pull the trigger yet? It’s not time to pull the trigger yet. Wait, because this isn’t as good as the sales can get. However, it’s better than what it was last month.”
Dendy also says the hope is that politically things will shake out in the next few months, and we’ll know clearly where the market stands.